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Pretax income for year rises 27%; quarterly revenues exceed $100 million;
GMP Private Client achieves profitability in Q4
TORONTO, March 1 /CNW/ - GMP Capital Trust (the Fund) today released its
financial results for the three and 12-month periods ended December 31, 2006.
Revenue reached a quarterly record of $103.6 million in the fourth quarter of
2006 and $357.3 million for the fiscal year 2006, representing a
year-over-year increase of 40% over fiscal year 2005. Net income for the
fourth quarter and the year was $30.6 million and $120.0 million,
respectively, and the Fund generated an annualized return on unitholders'
equity (ROE) of 44.6% and 52.3% for the quarter and the year, respectively.
These results reflect the strong results generated across all business
segments.
The selected highlights and pro forma data below should be read in
conjunction with the Selected Financial Information and Other Information
sections in this press release.
Fourth Quarter 2006 Highlights
- Record revenue of $103.6 million for the three-month period ended
December 31, 2006 compared with revenue of $53.2 million in the
two-month period ended December 31, 2005
- Pre-tax income of $34.7 million compared with pre-tax income of
$19.3 million in the fourth quarter 2005
- GMP Private Client achieves profitability in the fourth quarter 2006
with pre-tax income of $0.6 million
- Net income of $30.6 million ($0.49 per basic unit) compared with pro
forma net income of $17.3 million (pro forma earnings of $0.30 per
basic unit) in the fourth quarter 2005
- Annualized ROE of 44.6% compared with pro forma annualized ROE of
55.9% in the fourth quarter 2005 on average unitholders' equity of
$274.4 million compared with average unitholders' equity of
$185.5 million in fourth quarter 2005
- Distributable cash of $36.0 million ($0.58 per basic unit) compared
with pro forma distributable cash of $18.0 million ($0.32 per basic
unit) in the fourth quarter 2005
Fiscal 2006 Highlights
- Record revenue of $357.3 million, up 40% from revenue of
$255.7 million in fiscal 2005
- Record pre-tax income of $131.1 million, up 27% from pre-tax income
of $103.6 million in fiscal 2005
- Record net income of $120.0 million ($2.01 per basic unit), up
$23.7 million from pro forma net income of $96.3 million (pro forma
earnings of $1.70 per basic unit) in fiscal 2005
- ROE of 52.3% compared with pro forma annualized ROE of 59.9% in
fiscal 2005
- Distributable cash of $131.5 million ($2.20 per basic unit) compared
with pro forma distributable cash of $98.5 million ($1.74 per basic
unit) in fiscal 2005
- Payout ratio of 88.4% in fiscal 2006, including special distribution
- Ranked No. 1 in total value of common equity underwriting
transactions completed in Canada, up 27% over fiscal 2005 to
$2.8 billion
- 51% growth over fiscal 2005 in total value of M&amp;A advisory mandates
to US$8.3 billion
- Ranked No. 1 in TSX block trading volume for the second consecutive
year with 11.3% market share
"We achieved excellent results across all our business segments in 2006,
as a result of our focused strategy, the abilities of our people and our
unparalleled execution capabilities in the Canadian mid-market," said Kevin
Sullivan, Chief Executive Officer. "2006 was a year of many new initiatives
and outstanding progress for all of our business segments. We made our entry
into the private equity business with the establishment of our Private Capital
Management segment following our acquisition of EdgeStone Capital Partners.
Our Capital Markets segment established operations in the United Kingdom, and
we further solidified our reputation as an investment banking firm of choice
by our target clients as evidenced by our role in several high-profile deals.
We also saw significant developments in our Wealth Management segment with the
addition of several investment advisory teams, an appreciable increase in our
assets under administration and reaching profitability in our fourth quarter.
These achievements are tangible proof of the strength of human capital at GMP
Capital Trust and of our commitment to providing superior performance for our
clients and unitholders."
SELECTED FINANCIAL INFORMATION
-------------------------------------------------------------------------
Fourth Fourth
Selected financial Quarter Quarter
information 2006 2005 Fiscal 2006 Fiscal 2005
---------------------------------------------------
3 months 2 months 12 months 11 months
($000, except per ended ended ended ended
unit/common share December 31, December 31, December 31, December 31,
and % amounts) 2006 2005 2006 2005
-------------------------------------------------------------------------
Revenue 103,597 53,225 357,312 255,672
-------------------------------------------------------------------------
Expenses 68,878 33,934 226,163 152,021
-------------------------------------------------------------------------
Income before income
taxes 34,669 19,258 131,102 103,604
-------------------------------------------------------------------------
Net income 30,561 13,520 119,964 67,832
-------------------------------------------------------------------------
Pro forma net
income(a,b) n/a 17,288 n/a 96,322
-------------------------------------------------------------------------
Basic earnings per
unit/common share(c) $ 0.49 $ 0.24 $ 2.01 $ 1.20
-------------------------------------------------------------------------
Diluted earnings per
unit/common share(c) $ 0.48 $ 0.23 $ 1.94 $ 1.17
-------------------------------------------------------------------------
Pro forma basic
earnings per unit(a) n/a $ 0.30 n/a $ 1.70
-------------------------------------------------------------------------
Pro forma diluted
earnings per unit(a) n/a $ 0.29 n/a $ 1.66
-------------------------------------------------------------------------
Dividends declared per
common share n/a $ 0.05 n/a $ 0.60
-------------------------------------------------------------------------
Cash distributions
declared per unit $ 0.375 $ 0.1042 $ 1.4168 $ 0.1042
-------------------------------------------------------------------------
Special cash
distributions declared
per unit $ 0.50 n/a $ 0.50 n/a
-------------------------------------------------------------------------
Distributable cash per
basic unit(d) $ 0.58 $ 0.32 $ 2.20 $ 1.74
-------------------------------------------------------------------------
Payout ratio(a,e) 151.9% n/a 88.4% n/a
-------------------------------------------------------------------------
Return on equity(a) 44.6% n/a 52.3% n/a
-------------------------------------------------------------------------
Pro forma return on
equity(a) n/a 55.9% n/a 59.9%
-------------------------------------------------------------------------
a. These figures are considered non-GAAP measures. The selected pro
forma data has been derived from and should be read in conjunction
with the "Presentation of Financial Information and Non-GAAP
Measures" in the 2006 Annual MD&amp;A. Pro forma data reflects such
adjustments as are necessary, in the opinion of management, for a
fair presentation of the results of operations and unitholders'
equity of the Fund on a pro forma basis following the Conversion.
Such pro forma information is intended to reflect the financial
results of the Company as if it had carried on business as an income
trust during the periods presented. This pro forma data is not
necessarily indicative of the results that actually would have been
achieved if the Conversion had taken place and been effective during
those periods.
b. Pro forma net income reflects an adjustment to income tax expense to
reflect the current tax attributes of the Fund Group under the income
trust structure. The pro forma income tax expense reflects required
taxes relating to corporate subsidiaries of the Fund and should be
read in conjunction with the "Pro forma Net Income Reconciliation"
and "Quarterly Pro Forma Net Income Reconciliation" sections in the
2006 Annual MD&amp;A.
c. Comparative common shares outstanding have been restated to reflect a
two-for-one exchange of one common share of the Company for two Fund
units based on the average common shares outstanding for the
applicable period.
d. Distributable cash per basic unit, a non-GAAP measure, is determined
by dividing distributable cash by the basic weighted-average number
of units outstanding for the applicable period, on a basis consistent
with the determination of net income per basic unit.
e. The payout ratio is determined by dividing aggregate cash
distributions declared by distributable cash.
FOURTH QUARTER 2006 VERSUS FOURTH QUARTER 2005
Fourth quarter 2006 revenue reached a record $103.6 million, representing
an increase of $50.4 million over fourth quarter 2005. The increase reflects
strong performances from the Capital Markets and Wealth Management segments in
fourth quarter 2006 and the shorter two-month reporting period of fourth
quarter 2005 due to the change in our year end. Revenue for the Capital
Markets segment increased $36.1 million in fourth quarter 2006 compared with
the fourth quarter 2005 driven by sustained momentum in merger and acquisition
(M&amp;A) activity in the Canadian capital markets and the participation of GMP
Securities in a number of advisory transactions and equity financings in the
oil and gas, industrials and special situations and mining sectors during this
period. Sales and trading commission revenues were $24.7 million, an increase
of $11.1 million compared with fourth quarter 2005 due to greater activity in
the Canadian equity markets driven by an increase in demand for
commodity-based equities. Revenues of the Wealth Management segment rose by
$8.0 million to $11.0 million in fourth quarter 2006 reflecting the successful
growth of GMP Private Client's team of professionals and steady growth in
assets under administration. The Private Capital Management segment
contributed $6.3 million to revenues in fourth quarter 2006 reflecting steady
contributions from management fees generated by the EdgeStone Funds.
Expenses in the fourth quarter 2006 were $68.9 million, representing an
increase of $34.9 million compared with fourth quarter 2005. Compensation and
benefits expenses in the fourth quarter 2006 were $51.6 million representing
an increase of $24.7 million compared with fourth quarter 2005 due to higher
variable incentive-based compensation expenses, which increased $19.4 million
over fourth quarter 2005 as a result of higher revenue generated across all
business segments. Fixed salaries and benefits expenses increased $3.9 million
due to continued growth in the Wealth Management and Capital Markets segments
and the integration of salaries and benefits expenses associated with the
Private Capital Management segment. The remaining increase of $1.4 million in
compensation and benefits expenses compared to fourth quarter 2005 reflects
growth in Fund unit-based and loan-based compensation programs.
Non-compensation related expenses in the fourth quarter 2006 were
$17.3 million, representing an increase of $10.2 million compared with fourth
quarter 2005 due to the inclusion of the expenses of the Private Capital
Management segment in fourth quarter 2006, the shorter reporting period in
fourth quarter 2005 and continued growth in the Wealth Management and Capital
Markets segments in 2006. Selling, general and administrative expenses were
$4.4 million higher in fourth quarter 2006 compared to fourth quarter 2005
with the Capital Markets segment reporting a $2.0 million increase as a result
of the shorter reporting period in fourth quarter 2005, the inclusion of
$1.4 million in expenses associated with the Private Capital Management
segment and continued growth in the Wealth Management segment which reported a
$1.0 million increase in selling, general and administrative expenses.
Interest expenses increased $1.7 million over fourth quarter 2005 primarily
due to $0.7 million in financing costs incurred in the Corporate segment in
fourth quarter 2006 and higher client-related interest expense reflecting
higher client-related balances in the Wealth Management segment. Amortization
expense of $4.5 million represents a $4.1 million increase over fourth quarter
2005 mainly due to the amortization of intangible assets acquired in
connection with the EdgeStone acquisition and higher monthly amortization
expenses associated with the lease of new Toronto offices. The office
expansion and upgrade in September 2006 was undertaken to accommodate larger
advisory teams in GMP Private Client, growth in GMP Securities and to provide
enhanced facilities to our clients.
Net income in the fourth quarter 2006 was $30.6 million (or $0.49 per
basic unit) compared with pro forma net income of $17.3 million (or $0.30 per
basic unit) in the fourth quarter 2005. For the fourth quarter 2006,
annualized ROE was 44.6% compared with pro forma ROE of 55.9% in the fourth
quarter 2005, on average unitholders' equity of $274.4 million compared with
average unitholders' equity of $185.5 million in fourth quarter 2005.
Distributable cash was $36.0 million (or $0.58 per basic unit) in the fourth
quarter 2006 compared with pro forma distributable cash of $18.0 million (or
$0.32 per basic unit) in the fourth quarter 2005. Cash distributions declared,
excluding the special cash distribution, were $23.3 million, representing a
fourth quarter 2006 payout ratio of 64.8%.
FISCAL 2006 VERSUS FISCAL 2005
Revenue for fiscal 2006 reached a record $357.3 million, representing an
increase of $101.6 million (or 39.8%) over fiscal 2005 reflecting the record
results achieved this year in the Capital Markets segment which delivered an
increase of $68.9 million, revenue growth in the Wealth Management segment of
$21.8 million and the contribution to revenue of $12.6 million from the
Private Capital Management segment for the period from July 4, 2006 (the date
of the EdgeStone acquisition) to December 31, 2006.
Expenses in fiscal 2006 were $226.2 million, representing an increase of
$74.1 million (or 48.8%) over fiscal 2005. This increase was mainly related to
higher compensation and benefits expenses, which rose $51.7 million as a
result of higher variable incentive-based compensation expenses, which
increased $39.7 million due to strong overall business performance.
Non-compensation related expenses for fiscal 2006 were $52.4 million,
representing an increase of $22.4 million (or 74.9%) compared with fiscal 2005
as a result of higher transaction volumes experienced in the Capital Markets
segment, operational growth in the Wealth Management segment and the inclusion
of expenses associated with the Private Capital Management segment since its
acquisition in July 2006.
Net income was $120.0 million (or $2.01 per basic unit) in fiscal 2006,
representing an increase of 24.6% over pro forma net income of $96.3 million
(or $1.70 per basic unit) in fiscal 2005. ROE was 52.3% in fiscal 2006
compared with pro forma annualized ROE of 59.9% in fiscal 2005. Distributable
cash was $131.5 million (or $2.20 per basic unit) in fiscal 2006 compared with
pro forma distributable cash of $98.5 million (or $1.74 per basic unit) in
fiscal 2005.
RESULTS OF BUSINESS SEGMENTS
The following section provides an analysis of the Fund Group's three
business segments and the corporate segment for the fourth quarter 2006 and
the fourth quarter 2005. For a discussion of business segment results for
fiscal 2006 and fiscal 2005 see the 2006 Annual MD&amp;A. These segments are based
upon the products and services provided and the type of customer served, and
they reflect the manner in which financial information is currently evaluated
by management. For further details relating to segmented information see
note 28 to the 2006 Annual Financial Statements.
CAPITAL MARKETS
The following table presents the results of the Capital Markets segment
for the fourth quarter 2006 and the fourth quarter 2005.
------------------------
Fourth Fourth
Quarter Quarter
2006 2005
-------------------------------------------------------------------------
3 months 2 months
ended ended
December 31, December 31,
($000, unless otherwise indicated) 2006 2005
-------------------------------------------------------------------------
Revenue 87,257 51,166
-------------------------------------------------------------------------
Investment banking 55,205 32,160
-------------------------------------------------------------------------
Commission income 24,739 13,611
-------------------------------------------------------------------------
Principal activities 3,376 3,196
-------------------------------------------------------------------------
Interest income 3,106 2,096
-------------------------------------------------------------------------
Other income 831 103
-------------------------------------------------------------------------
Expenses 47,787 28,224
-------------------------------------------------------------------------
Employee compensation and benefits 40,661 23,588
-------------------------------------------------------------------------
Selling, general and administrative 6,112 4,137
-------------------------------------------------------------------------
Interest 596 298
-------------------------------------------------------------------------
Amortization 418 201
-------------------------------------------------------------------------
Income before income taxes and non-controlling
interest 39,470 22,942
-------------------------------------------------------------------------
Number of employees 228 189
-------------------------------------------------------------------------
Revenue in the Capital Markets segment for fourth quarter 2006 was
$87.3 million, representing an increase of $36.1 million (or 70.5%) compared
with fourth quarter 2005.
The following table presents investment banking revenue by sector earned
by the Capital Markets segment for fourth quarter 2006 compared with fourth
quarter 2005.
------------------------
Fourth Fourth
Quarter Quarter
2006 2005
-------------------------------------------------------------------------
3 months 2 months
ended ended
December 31, December 31,
($000, unless otherwise indicated) 2006 2005
-------------------------------------------------------------------------
Mining 14,783 12,789
-------------------------------------------------------------------------
Oil and gas 18,091 14,404
-------------------------------------------------------------------------
Industrials and special situations 17,998 1,787
-------------------------------------------------------------------------
Technology and healthcare 3,878 1,565
-------------------------------------------------------------------------
Non-bank financial service 307 1,434
-------------------------------------------------------------------------
Telecommunications, cable and media 148 181
-------------------------------------------------------------------------
Total Investment Banking Revenue 55,205 32,160
-------------------------------------------------------------------------
Investment banking revenue was $55.2 million in fourth quarter 2006,
representing an increase of $23.0 million (or 71.7%) over fourth quarter 2005.
Investment banking revenue in fourth quarter 2006 was driven by $24.9 million
in advisory fees, which rose $20.5 million from $4.4 million in advisory fees
recorded in fourth quarter 2005. Of particular note, GMP Securities acted as
financial advisor in fourth quarter 2006 to Atlas Tube, Inc. on its sale to
the Carlyle Group, a transaction valued at approximately US$1.5 billion. Our
involvement in increasingly larger deals is a testament to the team at GMP
Securities and its growing franchise. The total value of M&amp;A transactions
announced in the Canadian marketplace in the fourth quarter 2006 declined
17.9% to approximately US$102.5 billion from approximately US$124.8 billion in
the fourth quarter of calendar 2005. Consistent with the trend in the Canadian
marketplace, the number of M&amp;A transactions announced in Canada in the fourth
quarter 2006 in which GMP Securities acted as financial advisor decreased to 3
from 5 in fourth quarter 2005, and the total value of such transactions
decreased 14.3% to approximately US$1.8 billion from approximately
US$2.1 billion in the fourth quarter of calendar 2005(1).
Underwriting revenue was $30.3 million in fourth quarter 2006,
representing a $2.5 million increase from fourth quarter 2005. The total
dollar value of common equity underwriting transactions led or co-led by GMP
Securities increased to approximately $826.4 million in fourth quarter 2006,
representing an increase of 11.3% from approximately $742.3 million in the
fourth quarter of calendar 2005. This result is more favourable when compared
with the performance of the Canadian capital markets, which experienced a 1.0%
decrease in the dollar value of common equity underwriting for the same period
of time. GMP Securities ranked number one among Canadian investment dealers in
the dollar value of common equity issuances in the fourth quarter 2006,
compared to its number two position in the fourth quarter 2005(2).
Sales and trading commissions were $24.7 million in fourth quarter 2006,
representing an increase of $11.1 million (or 81.8%) over fourth quarter 2005
due to greater activity in the Canadian equity markets over this time driven
by an increase in client-related demand for commodity-based equities.
Facilitation losses were 13.0% of gross commissions generated compared with
8.9% in fourth quarter 2005 as a result of increased volatility in equity
pricing, particularly in the commodity sector where GMP Securities actively
executed trades on behalf of clients. In the fourth quarter 2006, GMP
Securities ranked number two in equity block trading volume on the TSX
reporting total block trading volume of 1.7 billion shares in fourth quarter
2006, down from its number one position in the fourth quarter of calendar 2005
when it was involved in the trading of 1.8 billion shares(3).
Revenue from principal activities was $3.4 million in fourth quarter
2006, which was relatively unchanged from revenue of $3.2 million recorded in
the fourth quarter 2005. Revenue from principal activities is not a
significant focus of current operations with most securities acquired
incidental to the core business.
Interest income was $3.1 million in fourth quarter 2006, representing an
increase of $1.0 million (or 48.2%) from fourth quarter 2005 primarily due to
the shorter reporting period in fourth quarter 2005 and higher interest earned
on GMP Securities' own cash position as a result of higher cash balances
compared with fourth quarter 2005.
--------------------------------
(1) Source: Bloomberg as at February 7, 2007. Data contains announced
transactions based in Canada in the specified period; includes target
or seller and acquirer.
(2) Source: FPinfomart as at February 7, 2007. Data is ranked by value of
completed transactions and is presented on a "Full Credit to Book"
basis whereby the entire transaction value is allocated to the
bookrunner. For these purposes, "equity" includes the following:
private placements with a $1.5 million minimum; special warrants,
irrespective of whether the issuer has received the total proceeds;
common shares and units; convertible debt; and exercise of over-
allotment option of original transaction launched during the period
reported on. For these purposes, "equity" excludes the following:
preferred shares, preferred hybrids, income trusts, rights offerings,
and other derivatives.
(3) Source: CanadaEquity.com as at February 7, 2007.
The following table presents employee compensation and benefits expenses
for the fourth quarter 2006 compared with fourth quarter 2005. These expenses
represent the largest component of total expenses for the Capital Markets
segment.
------------------------
Fourth Fourth
Quarter Quarter
2006 2005
-------------------------------------------------------------------------
3 months 2 months
ended ended
December 31, December 31,
($000, unless otherwise indicated) 2006 2005
-------------------------------------------------------------------------
Fixed salaries and benefits 3,986 2,419
-------------------------------------------------------------------------
Variable incentive-based compensation 34,688 20,127
-------------------------------------------------------------------------
Fund unit/stock-based compensation 1,987 1,042
-------------------------------------------------------------------------
Total Employee Compensation and Benefits 40,661 23,588
-------------------------------------------------------------------------
Ratio of Total Compensation and Benefits
to Revenue 46.6% 46.1%
-------------------------------------------------------------------------
Total expenses in the fourth quarter 2006 were $47.8 million,
representing an increase of $19.6 million (or 69.3%) from fourth quarter 2005.
This increase was mainly due to higher employee compensation and benefits
expenses, which rose $17.1 million on a year-over-year basis. Variable
incentive-based compensation expenses accounted for $14.6 million of the
increase as a result of higher revenue generation. Variable incentive-based
compensation as a percentage of revenue remained virtually unchanged at 39.8%
in the fourth quarter 2006 compared with 39.3% in the fourth quarter 2005.
Fixed salaries and benefits expenses were $4.0 million in fourth quarter
2006, representing an increase of 64.8% over fourth quarter 2005. This
increase was mainly due to the shorter reporting period in fourth quarter 2005
and increased levels of employment in 2006 primarily in the operations,
finance and administrative areas to support the growth in business volumes and
activity. In addition, 10 professionals joined the Fund Group in fourth
quarter 2006 as part of the successful start-up of GMP Europe. Fund
unit/stock-based compensation costs increased as a result of higher
participation in the executive unit loan plan and an increase in the fair
value of options granted under the Fund unit option plan and outstanding in
the fourth quarter 2006 compared with the fourth quarter 2005. The ratio of
total compensation and benefits expenses to revenue for the fourth quarter
2006 was 46.6% compared with 46.1% in the fourth quarter 2005 and reflects
investments made this quarter to establish our GMP Europe operations and
continued investment in our various support departments over this time.
Total non-compensation expenses were $7.1 million, representing an
increase of $2.5 million (or 53.7%) compared with fourth quarter 2005.
Selling, general and administrative expenses accounted for $2.0 million of the
increase in non-compensation related expenses in fourth quarter 2006. This
increase was largely due to the shorter reporting period in fourth quarter
2005. Occupancy costs and related amortization increased by $0.3 million in
fourth quarter 2006 as a result of the higher costs associated with the larger
office space.
For the fourth quarter 2006, the Capital Markets segment recorded income
before income taxes and non-controlling interest of $39.5 million,
representing a 72.0% increase from the fourth quarter 2005.
WEALTH MANAGEMENT
The following table presents the results of the Wealth Management segment
for the fourth quarter 2006 compared with the results for fourth quarter 2005.
------------------------
Fourth Fourth
Quarter Quarter
2006 2005
-------------------------------------------------------------------------
3 months 2 months
ended ended
December 31, December 31,
($000, unless otherwise indicated) 2006 2005
-------------------------------------------------------------------------
Revenue 10,961 3,003
-------------------------------------------------------------------------
Commission income 5,739 1,887
-------------------------------------------------------------------------
Investment management and fee income 2,944 -
-------------------------------------------------------------------------
Interest income 2,166 1,116
-------------------------------------------------------------------------
Other income 112 -
-------------------------------------------------------------------------
Expenses 10,336 3,995
-------------------------------------------------------------------------
Employee compensation and benefits 6,232 1,731
-------------------------------------------------------------------------
Selling, general and administrative 2,171 1,116
-------------------------------------------------------------------------
Interest 1,452 961
-------------------------------------------------------------------------
Amortization 481 187
-------------------------------------------------------------------------
Income/(loss) before income taxes and
non-controlling interest 625 (992)
-------------------------------------------------------------------------
Number of employees 91 47
-------------------------------------------------------------------------
Number of investment advisors 38 20
-------------------------------------------------------------------------
Number of advisory teams 27 16
-------------------------------------------------------------------------
Assets under administration ($millions) 3,258 1,754
-------------------------------------------------------------------------
The Wealth Management segment reported revenue of $11.0 million in fourth
quarter 2006, representing an increase of $8.0 million from the fourth quarter
2005. This increase reflects the growing contribution of the segment's
investment advisory teams. Fourth quarter 2006 revenue was comprised of
commissions of $5.7 million, fee revenue of $2.9 million and interest revenue
of $2.2 million. Fee-based revenues for fourth quarter 2006 include a
$1.0 million positive adjustment made in the quarter to accrue fees earned and
not yet received as at December 31, 2006.
Six new advisory teams were added across the Toronto and Calgary offices
during the fourth quarter 2006, bringing the total number of advisory teams in
the Wealth Management segment to 27 as at December 31, 2006. Assets under
administration were $3.3 billion in the fourth quarter 2006, representing an
increase of 85.7% over the fourth quarter 2005. Assets in managed account
programs grew to $522.2 million in the fourth quarter 2006 compared with
$79.7 million in the fourth quarter 2005, reflecting growth in fee-based
clientele and GMP Private Client's continued development of offerings.
As of the date hereof, the Wealth Management segment has a total of 28
investment advisory teams located across its Calgary, Toronto, and Vancouver
offices. In addition, the Calgary office opened a satellite branch in Banff
this quarter which we believe is well positioned to serve that market's high
net worth demographic. GMP Private Client now manages approximately
$3.5 billion of client assets in equities, fixed income securities, mutual
funds and managed account programs.
-------------------------------------
Advisory Teams
-------------------------------------------------------------------------
At At At
February 28, December 31, December 31,
Office Location 2007 2006 2005
-------------------------------------------------------------------------
Toronto 16 16 10
-------------------------------------------------------------------------
Calgary 8 8 4
-------------------------------------------------------------------------
Vancouver 4 3 2
-------------------------------------------------------------------------
Total 28 27 16
-------------------------------------------------------------------------
During the fourth quarter 2006, GMP Private Client implemented several
technological tools to enhance client experience and improve advisor
productivity. Automated account opening and internet communication tools have
enabled advisors to provide clients with exceptional service. In addition, GMP
Private Client is developing insurance and wealth protection solutions to
deliver premiere wealth services to our target clientele.
The following table presents employee compensation and benefits expenses
for the Wealth Management segment for the fourth quarter 2006 compared with
the expenses for fourth quarter 2005.
------------------------
Fourth Fourth
Quarter Quarter
2006 2005
-------------------------------------------------------------------------
3 months 2 months
ended ended
December 31, December 31,
($000) 2006 2005
-------------------------------------------------------------------------
Fixed salaries and benefits 1,133 521
-------------------------------------------------------------------------
Variable incentive-based compensation 4,554 1,018
-------------------------------------------------------------------------
Fund unit-based compensation 99 47
-------------------------------------------------------------------------
Investment advisor transition assistance 446 145
-------------------------------------------------------------------------
Total Employee Compensation and Benefits 6,232 1,731
-------------------------------------------------------------------------
The Wealth Management segment reported expenses of $10.3 million for the
fourth quarter 2006, representing an increase of $6.3 million over the fourth
quarter 2005. These expenses included $6.2 million in compensation and
benefits expenses and $4.1 million in non-compensation related expenses.
Non-compensation related expenses for the fourth quarter 2006 increased
$1.8 million over fourth quarter 2005, reflecting increased selling, general
and administrative expenses due to higher levels of business activity,
primarily in support of the Calgary and Vancouver offices. Also included in
non-compensation related expenses was $0.3 million in amortization expenses
mainly related to $3.2 million in capitalized pre-operating expenses incurred
in the development of the Wealth Management segment, which is being amortized
over three years. Beginning in September 2006, occupancy costs for the Wealth
Management segment increased reflecting higher costs associated with the
larger office space in Toronto.
The Wealth Management segment reported income before income taxes and
non-controlling interest of $0.6 million for the fourth quarter 2006 compared
with a loss of $1.0 million in the fourth quarter 2005. This result was
primarily due to GMP Private Client's successful implementation of its growth
strategy in key target markets.
PRIVATE CAPITAL MANAGEMENT
The following table presents the results for the Private Capital
Management segment which consists of the business and operations of EdgeStone
for the fourth quarter 2006.
-----------
Fourth
Quarter
2006
-------------------------------------------------------------------------
3 months
ended
December 31,
($000, unless otherwise indicated) 2006
-------------------------------------------------------------------------
Revenue 6,268
-------------------------------------------------------------------------
Investment management and fee income 6,108
-------------------------------------------------------------------------
Interest income 49
-------------------------------------------------------------------------
Other income 111
-------------------------------------------------------------------------
Expenses 4,081
-------------------------------------------------------------------------
Employee compensation and benefits 2,569
-------------------------------------------------------------------------
Selling, general and administrative 1,418
-------------------------------------------------------------------------
Interest 6
-------------------------------------------------------------------------
Amortization 88
-------------------------------------------------------------------------
Income before income taxes and non-controlling interest 2,187
-------------------------------------------------------------------------
Number of employees 34
-------------------------------------------------------------------------
The Private Capital Management segment reported revenue of $6.3 million
in fourth quarter 2006 comprised primarily of fee based revenues generated by
EdgeStone in the management of the EdgeStone Funds.
The following table presents employee compensation and benefits expenses
for the Private Capital Management segment for the fourth quarter 2006.
-----------
Fourth
Quarter
2006
-------------------------------------------------------------------------
3 months
ended
December 31,
($000, unless otherwise indicated) 2006
-------------------------------------------------------------------------
Fixed salaries and benefits 1,693
-------------------------------------------------------------------------
Variable incentive-based compensation 794
-------------------------------------------------------------------------
Fund unit-based compensation 82
-------------------------------------------------------------------------
Total Employee Compensation and Benefits 2,569
-------------------------------------------------------------------------
Expenses for the fourth quarter 2006 reflect normal operating activities.
Selling, general and administrative expenses have increased slightly in the
fourth quarter 2006 compared to third quarter 2006 as a result of higher
business activity experienced during the fourth quarter 2006.
During the fourth quarter 2006, the EdgeStone Funds made investments in
the aggregate amount of $6.9 million.
CORPORATE
The Corporate segment includes inter-segment eliminations between
business segments and enterprise-wide items.
The following table presents the results for the fourth quarter 2006 and
the fourth quarter 2005.
--------------------------------------------------
Inter-segment Enterprise-wide
--------------------------------------------------
Fourth Fourth Fourth Fourth
Quarter Quarter Quarter Quarter
2006 2005 2006 2005
-------------------------------------------------------------------------
3 months 2 months 3 months 2 months
ended ended ended ended
December 31, December 31, December 31, December 31,
($000) 2006 2005 2006 2005
-------------------------------------------------------------------------
Revenue (934) (818) 45 (126)
-------------------------------------------------------------------------
Expenses (934) (818) 7,608 2,533
-------------------------------------------------------------------------
Employee compensation
and benefits - - 2,089 1,569
-------------------------------------------------------------------------
Selling, general and
administrative (388) (110) 1,249 1,018
-------------------------------------------------------------------------
Interest (546) (708) 741 (54)
-------------------------------------------------------------------------
Amortization - - 3,529 -
-------------------------------------------------------------------------
Loss before income
taxes and
non-controlling
interest - - (7,563) (2,659)
-------------------------------------------------------------------------
------------------------
Total Corporate
Fourth Fourth
Quarter Quarter
2006 2005
-----------------------------------------------
3 months 2 months
ended ended
December 31, December 31,
($000) 2006 2005
-----------------------------------------------
Revenue (889) (944)
-----------------------------------------------
Expenses 6,674 1,715
-----------------------------------------------
Employee compensation
and benefits 2,089 1,569
-----------------------------------------------
Selling, general and
administrative 861 908
-----------------------------------------------
Interest 195 (762)
-----------------------------------------------
Amortization 3,529 -
-----------------------------------------------
Loss before income
taxes and
non-controlling
interest (7,563) (2,659)
-----------------------------------------------
Due to the nature of the activities reported in this segment, management
believes that a period-over-period comparison is not useful. The following
highlights the main factors affecting the results in each period.
FOURTH QUARTER 2006
The net loss before income taxes and non-controlling interest of
$7.6 million for the fourth quarter 2006 reflects $3.5 million of amortization
expenses related to intangible assets recorded in connection with the
EdgeStone acquisition. Employee compensation and benefits expenses include the
accrued compensation relating to the Chief Executive Officer of the
Administrator, the administrator of the Fund, and other administrative
support. Selling, general and administrative expense includes enterprise-wide
expenses which have not been allocated to the business segments. Fourth
quarter 2006 includes $0.3 million in professional fees related to internal
control documentation and evaluation to assist the Fund in meeting compliance
requirements of the Canadian Securities Administrators and Multilateral
Instrument 52-109 - Certification of Disclosure in Issuers' Annual and Interim
Filings and $0.3 million in fees paid in connection with new initiatives which
have not been capitalized. Interest expenses include financing costs
associated with the issuance of senior unsecured notes by GMP Holding
Partnership by way of private placement in November 2006 (the "Notes") and
financing costs incurred in connection with the subordinated loan undertaken
to finance a portion of the EdgeStone acquisition. The net proceeds of the
private placement were used by the Fund Group to repay the subordinated loan
in November 2006 and for general corporate purposes.
FOURTH QUARTER 2005
The net loss before income taxes and non-controlling interest of
$2.7 million for the fourth quarter 2005 reflects $1.4 million in executive
incentive-based compensation amounts accrued in the quarter. Selling, general
and administrative expenses included $0.9 million in legal, tax, accounting
and advisory fees incurred in connection with the Conversion. The interest
expense includes an elimination of interest expense paid by GMP Private Client
to the Company relating to an inter-company subordinated loan established
prior to the Conversion.
DISTRIBUTABLE CASH AND DISTRIBUTIONS
The following table presents the Fund's determination of distributable
cash for the fourth quarter 2006 compared with the pro forma fourth quarter
2005. Management has made assumptions in preparing the pro forma summary of
distributable cash for fourth quarter 2005. Management believes the following
represents a reasonable estimate of what distributable cash would have been
for this period, had the Fund been in existence during that time. The pro
forma distributable cash summary is not necessarily indicative of the results
that actually would have been achieved if the Fund had been in existence
during this period. These assumptions do not include any possible reserves
that could have been taken by the board of directors of the general partners
of the Operating Partnerships.
------------------------
Fourth Fourth
Quarter Quarter
2006 2005(a)
-------------------------------------------------------------------------
3 months 2 months
ended ended
December 31, December 31,
($000, 000 of units, except per unit amounts) 2006 2005
-------------------------------------------------------------------------
Cash provided by (used in) operating activities 64,380 37,449
-------------------------------------------------------------------------
Add/(Deduct):
-------------------------------------------------------------------------
Net change in non-cash operating items(b) (26,207) (21,682)
-------------------------------------------------------------------------
Change in pro forma income taxes payable(c) n/a 3,767
-------------------------------------------------------------------------
Maintenance capital expenditures(d) (586) (148)
-------------------------------------------------------------------------
Non-controlling interest (50) (33)
-------------------------------------------------------------------------
Earnings of corporate subsidiaries not available
for distribution(e) (371) (95)
-------------------------------------------------------------------------
Future income taxes(f) (1,201) (1,233)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Distributable cash(g) 35,965 18,025
-------------------------------------------------------------------------
Weighted-average number of units - basic(h) 62,126 56,932
-------------------------------------------------------------------------
Weighted-average number of units - diluted(h) 63,632 58,803
-------------------------------------------------------------------------
Distributable cash per basic unit(g,h,i) $ 0.58 $ 0.32
-------------------------------------------------------------------------
Distributable cash per diluted unit(g,h,i) $ 0.57 $ 0.31
-------------------------------------------------------------------------
Cash distributions declared 54,627 n/a
-------------------------------------------------------------------------
Payout ratio(g,j) 151.9% n/a
-------------------------------------------------------------------------
a. These figures are pro forma.
b. Represents the change in non-cash operating items recorded on the
Fund's unaudited interim consolidated statement of cash flows.
c. Represents the difference between income taxes as reported and pro
forma income tax expense which reflects the current tax attributes of
the Fund Group under the income trust structure, as presented in the
"Quarterly Pro Forma Net Income Reconciliation" in the 2006 Annual
MD&amp;A.
d. Maintenance capital expenditures are determined based on the capital
requirements necessary to sustain current levels of economic
activity. These expenditures are based on the capital asset
replacement cycle over the expected service capability of certain
existing capital assets, including the replacement of furniture and
fixtures, computer equipment, computer software and leasehold
improvements. For further discussion, see "Distributable Cash and
Distributions - Maintenance Capital Expenditures" in the 2006 Annual
MD&amp;A.
e. The net income of the Fund's corporate subsidiaries is not included
in the determination of distributable cash.
f. Future income taxes represent a non-cash item recorded on the Fund's
unaudited interim consolidated statement of cash flows.
g. Distributable cash, distributable cash per unit and payout ratio are
not recognized measures under GAAP and do not have any standardized
meanings prescribed by GAAP. Therefore, these measures may not be
comparable to similar measures presented by other issuers. See
"Presentation of Financial Information and Non-GAAP Measures" in the
2006 Annual MD&amp;A.
h. Comparative common shares outstanding have been restated to reflect a
two-for-one exchange of one common share of the Company for two Fund
units based on the average common shares outstanding for the
applicable period.
i. Distributable cash per unit is determined by dividing distributable
cash by the weighted-average number of units outstanding for the
applicable period, on a basis consistent with the determination of
net income per unit.
j. The payout ratio is determined by dividing aggregate cash
distributions declared by distributable cash.
The Fund's payout ratio was 151.9% in fourth quarter 2006 reflecting a
special cash distribution of $0.50 per unit announced by the Fund on
November 21, 2006 and paid on January 19, 2007 to unitholders of record as of
December 29, 2006. This special cash distribution represented excess
distributable cash arising from the Fund's positive financial performance for
fiscal 2006. The payout ratio in fourth quarter 2006 was 64.8% excluding this
special cash distribution. Cash available for distribution in fourth quarter
2006 was $36.0 million, representing an increase of $18.0 million from pro
forma cash available for distribution in fourth quarter 2005 of $18.0 million.
This increase was primarily due to the strong operating results generated by
the Capital Markets and Wealth Management segments in fourth quarter 2006, the
contribution of the Private Capital Management segment and the shorter
reporting period in fourth quarter 2005.
For a further discussion on distributable cash and distributions refer to
"Distributable Cash and Distributions" in the 2006 Annual MD&amp;A and "Risk
Factors - Risks Related to the Fund Units - Cash Distributions" in our annual
information form dated February 28, 2007.
CONFERENCE CALL
Management will host a conference call and live audio webcast today at
11:00 a.m. (ET) today to discuss the Fund's fourth quarter and fiscal year
ended December 31, 2006. The call may be accessed by dialing 416-644-3414 or
1-800-733-7571. The webcast will be accessible at gmpcapitaltrust.com and will
be archived on the site. A replay of the conference call will be available
from Thursday, March 1, 2007, at 1:00 p.m. (ET) to Thursday March 8, 2007, at
11:59 p.m. (ET). The dial-in number for the replay is 416-640-1917 or
1-877-289-8525; access code 21214676 followed by the number sign.
OTHER INFORMATION
This press release should be read in conjunction with the Fund's 2006
Annual Financial Statements and the 2006 Annual MD&amp;A, which can be accessed on
our website at gmpcapitaltrust.com and on SEDAR at sedar.com. Additionally,
the 2006 Annual Financial Statements and the 2006 Annual MD&amp;A will be included
in our 2006 annual report, which we expect to be available at the end of March
2007.
Meaning of Certain References
In this press release all references to "fourth quarter 2006" refer to
the three months ended December 31, 2006. All references to "fourth quarter
2005" refer to the two months ended December 31, 2005. All references to
"fiscal 2006" refer to the 12 months ended December 31, 2006. All references
to "fiscal 2005" refer to the 11 months ended December 31, 2005. All
references to the "2006 Annual MD&amp;A" refer to the Fund's management's
discussion and analysis for the year ended December 31, 2006. All references
to the "2006 Annual Financial Statements" refer to the audited annual
consolidated financial statements for fiscal 2006. All references to "we",
"our", "us" and "Fund Group" refer to the Fund, together with its consolidated
operations. All references to "Fund units" refer to trust units of the Fund.
All references to "Exchangeable L.P. units" refer to Class B limited partner
units of Griffiths McBurney L.P. All references to "units" refer collectively
to the Fund units and the Exchangeable L.P. units. All references to the
"EdgeStone Funds" refer to the group of limited partnerships through which
EdgeStone manages the assets of its investors and clients. All references to
"management" refer to the directors, officers and other senior officers of
Griffiths McBurney Canada Corp., the administrator of the Fund. All references
to the "Conversion" refer to the conversion of GMP Capital Corp. (the
"Company") from a corporate entity into the Fund, an income trust, on
December 1, 2005. All references to "GAAP" refer to Canadian generally
accepted accounting principles.
UNAUDITED CONSOLIDATED BALANCE SHEETS
($000)
As at December,
------------------------
2006 2005
$ $
-------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents 139,691 57,739
Trading securities 80,106 57,993
Receivable from
Clients 415,233 432,126
Brokers 153,940 91,524
Other assets 63,063 32,488
-------------------------------------------------------------------------
Total current assets 852,033 671,870
-------------------------------------------------------------------------
Deferred costs 8,279 2,467
Capital assets 15,775 2,275
Employee loans receivable 16,854 10,904
Future income taxes 1,302 2,528
Goodwill and other intangible assets 139,234 -
-------------------------------------------------------------------------
1,033,477 690,044
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND UNITHOLDERS' EQUITY
Current
Short-term borrowing - 54
Obligations related to securities sold short 36,102 3,755
Payable to
Clients 470,272 334,715
Brokers 15,103 25,065
Issuers 63,006 82,922
Accounts payable and accrued liabilities 50,413 47,758
Distributions payable 39,161 5,974
Other liabilities 28,543 12,089
-------------------------------------------------------------------------
Total current liabilities 702,600 512,332
-------------------------------------------------------------------------
Long-term debt 60,000 -
Agency fee obligation 3,319 -
Non-controlling interest 1,738 198
-------------------------------------------------------------------------
Unitholders' equity 265,820 177,514
-------------------------------------------------------------------------
1,033,477 690,044
-------------------------------------------------------------------------
-------------------------------------------------------------------------
UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME
($000, except per unit/share amounts)
Three months Two months Year ended 11 months
ended ended ended ended
December 31, December 31, December 31, December 31,
2006 2005 2006 2005
$ $ $ $
-------------------------------------------------------------------------
REVENUE
Investment banking 55,205 32,160 197,364 156,242
Commissions 30,478 15,488 116,483 83,248
Investment management
and fee income 9,052 10 19,390 104
Principal activities 3,376 3,196 4,930 6,556
Interest 4,775 2,395 18,095 9,662
Other 711 (24) 1,050 (140)
-------------------------------------------------------------------------
103,597 53,225 357,312 255,672
-------------------------------------------------------------------------
EXPENSES
Employee compensation
and benefits 51,551 26,888 173,714 122,035
Selling, general and
administrative 10,562 6,161 36,532 26,432
Interest 2,249 497 6,825 2,086
Amortization 4,516 388 9,092 1,468
-------------------------------------------------------------------------
68,878 33,934 226,163 152,021
-------------------------------------------------------------------------
Income before the
undernoted 34,719 19,291 131,149 103,651
Non-controlling interest 50 33 47 47
-------------------------------------------------------------------------
Income before income
taxes 34,669 19,258 131,102 103,604
-------------------------------------------------------------------------
Income taxes
Current 2,907 4,505 10,310 36,791
Future 1,201 1,233 828 (1,019)
-------------------------------------------------------------------------
4,108 5,738 11,138 35,772
-------------------------------------------------------------------------
Net income 30,561 13,520 119,964 67,832
-------------------------------------------------------------------------
Net income per
unit/common share
Basic $ 0.49 $ 0.24 $ 2.01 $ 1.20
Diluted $ 0.48 $ 0.23 $ 1.94 $ 1.17
-------------------------------------------------------------------------
-------------------------------------------------------------------------
GMP Capital Trust
UNAUDITED
CONSOLIDATED STATEMENT OF CHANGES IN UNITHOLDERS'/SHAREHOLDERS' EQUITY
(000)
As at and for the year ended December 31,
Exchangeable
Common shares Fund units L.P. units
------------- ---------- ------------
No. $ No. $ No. $
-------------------------------------------------------------------------
Balance, January 31,
2005 28,164 122,544 - - - -
Issued under stock
option plan 104 2,020 - - -
Issuance of Fund
units in exchange
for common shares (18,262) (80,472) 36,524 80,472 - -
and $1 per share - - - (18,262) - -
Issuance of
Exchangeable L.P.
units in exchange (10,006) (44,092) - - 20,012 44,092
for common shares
and $1 per share - - - - - (10,006)
Issued under Fund
unit option plan - - 793 6,667 - -
Fund unit/
stock-based
compensation
expense - - - - - -
Dividends paid - - - - - -
Cash distributions
declared - Fund
units - - - - - -
Cash distributions
declared -
Exchangeable L.P.
units - - - - - -
Non-cash
distributions - - - 2,391 - -
Non-cash
allocations - - - - - 1,282
Net income - - - - - -
-------------------------------------------------------------------------
Balance,
December 31, 2005 - - 37,317 71,268 20,012 35,368
Foreign currency
translation of
self-sustaining
operations - - - - -
Issued under Fund
unit option plan - - 1,309 12,386 -
Issued as purchase
consideration in
business
acquisition, net
of issue costs - - 4,019 71,193
Exchange of
Exchangeable L.P.
units into Fund
units - - 1,791 3,165 (1,791) (3,165)
Fund unit/
stock-based
compensation
expense - - - - -
Cash distributions
declared - Fund
units - - - - -
Cash distributions
declared -
Exchangeable L.P.
units - - - - -
Net income - - - - -
-------------------------------------------------------------------------
Balance,
December 31, 2006 40,417 86,819 22,240 103,396
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total
Cumulative unitholders'/
Contributed Translation Retained shareholders'
surplus Account earnings equity
$ $ $ $
-------------------------------------------------------------------------
Balance, January 31,
2005 1,505 - 25,131 149,180
Issued under stock
option plan (711) - - 1,309
Issuance of Fund
units in exchange
for common shares -
and $1 per share - - (18,262)
Issuance of
Exchangeable L.P.
units in exchange - - - -
for common shares
and $1 per share - - - (10,006)
Issued under Fund
unit option plan (1,382) - - 5,285
Fund unit/
stock-based
compensation
expense 2,256 - - 2,256
Dividends paid - - (14,106) (14,106)
Cash distributions
declared
- Fund units - - (3,889) (3,889)
Cash distributions
declared -
Exchangeable L.P.
units - - (2,085) (2,085)
Non-cash
distributions - - (2,391) -
Non-cash
allocations - - (1,282) -
Net income - - 67,832 67,832
-------------------------------------------------------------------------
Balance,
December 31, 2005 1,668 - 69,210 177,514
Foreign currency
translation of
self-sustaining
operations 11 - 11
Issued under Fund
unit option plan (2,576) - - 9,810
Issued as purchase
consideration in
business
acquisition, net
of issue costs - - - 71,193
Exchange of
Exchangeable L.P.
units into Fund
units - - - -
Fund unit/
stock-based
compensation
expense 3,557 - 3,557
Cash distributions
declared - Fund
units - - (73,966) (73,966)
Cash distributions
declared -
Exchangeable L.P.
units - - (42,263) (42,263)
Net income - - 119,964 119,964
-------------------------------------------------------------------------
Balance,
December 31, 2006 2,649 11 72,945 265,820
-------------------------------------------------------------------------
-------------------------------------------------------------------------
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOW
($000)
Three months Two months Year 11 months
ended ended ended ended
December 31, December 31, December 31, December 31,
2006 2005 2006 2005
$ $ $ $
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income 30,561 13,520 119,964 67,832
Add (deduct) items not
involving cash
Amortization 4,516 388 9,092 1,468
Amortization of agency
fees and private
placement costs 524 - 932 -
Amortization of lease
inducement (92) - (92) -
Future income taxes 1,201 1,233 828 (1,019)
Fund unit/stock-based
compensation expense 955 448 3,557 2,256
Transition assistance
and other loan
amortization 458 145 1,258 347
Non-controlling
interest 50 33 47 47
-------------------------------------------------------------------------
38,173 15,767 135,586 70,931
Net change in non-cash
operating items 26,207 21,682 39,631 (85,405)
-------------------------------------------------------------------------
Cash provided by
(used in) operations 64,380 37,449 175,217 (14,474)
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from issuance
of long-term debt 60,000 - 60,000 -
Proceeds from
subordinated loan (20,000) - - -
Proceeds from issuance
of common shares - 445 - 1,309
Proceeds from issuance
of Fund units 6,030 5,285 9,810 5,285
Repayment of
short-term borrowing - 54 (54) (1,068)
Special cash
distributions paid on
Fund units - (18,262) - (18,262)
Special cash
distributions paid on
Exchangeable L.P.
units - (10,006) - (10,006)
Cash distributions
paid on Fund units (14,603) - (52,597) -
Cash distributions
paid on
Exchangeable L.P.
units (8,594) - (30,447) -
Dividends paid on
common shares (1,412) - (14,106)
Increase in
non-controlling
interest 1,519 3 1,493 16
-------------------------------------------------------------------------
Cash used in financing
activities 24,352 (23,893) (11,795) (36,832)
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Business acquisition (78) - (66,883) -
Pre-operating
expenditures (920) - (920) (926)
Purchase of capital
assets (3,078) (516) (13,667) (1,130)
-------------------------------------------------------------------------
Cash used in investing
activities (4,076) (516) (81,470) (2,056)
-------------------------------------------------------------------------
Net increase (decrease)
in cash and cash
equivalents 84,656 13,040 81,952 (53,362)
Cash and cash
equivalents,
beginning of period 55,035 44,699 57,739 111,101
-------------------------------------------------------------------------
Cash and cash
equivalents,
end of period 139,691 57,739 139,691 57,739
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Supplemental cash
flow information
Interest paid 1,842 216 6,238 2,086
Income taxes paid 4,201 2,837 25,329 33,544
-------------------------------------------------------------------------
-------------------------------------------------------------------------
ABOUT GMP CAPITAL TRUST
GMP Capital Trust carries on business through the following entities: GMP
Securities L.P. ("GMP Securities"), Griffiths McBurney Corp., GMP Securities
Europe LLP ("GMP Europe"), GMP Private Client L.P. and EdgeStone Capital
Partners, L.P. ("EdgeStone"). GMP Securities is a leading independent Canadian
investment dealer focused on investment banking and institutional equities for
corporate clients and institutional investors. GMP Securities can be found on
the web at gmpsecurities.com. Griffiths McBurney Corp. services institutional
clients in the United States while GMP Europe provides investment banking and
institutional equity services to clients located in Europe. GMP Private Client
is a full-service investment firm focused on high-net-worth private investors
that provides wealth preservation, income and growth strategies delivered by
seasoned investment advisors. GMP Private Client can be found on the web at
gmpprivateclient.com. EdgeStone is one of Canada's leading private equity
firms, providing capital, strategic direction and business and financial
advice to help promising mid-market and early stage companies achieve their
full potential. EdgeStone can be found on the web at edgestone.com. GMP
Capital Trust is listed on the Toronto Stock Exchange under the symbol GMP.UN.
The website is gmpcapitaltrust.com. GMP Capital Trust has offices in Toronto,
Calgary, Montreal, Vancouver, Geneva, Switzerland and London, England.
Forward-Looking Statements
This press release may contain "forward-looking statements" (as defined
under applicable securities laws) concerning anticipated future events,
results, circumstances, performance or expectations that are not historical
facts but instead represent our beliefs, expectations, estimates and
projections regarding future events, many of which, by their nature, are
inherently uncertain and beyond our control. These statements are not
guarantees of future performance and are subject to numerous risks and
uncertainties, including those described in the Fund's regulatory filings,
which are available on our website at gmpcapitaltrust.com and on SEDAR at
sedar.com. The Fund Group's primary business activities, by their nature, are
both competitive and subject to various risks. These risks include market,
credit, liquidity, operational and regulatory risks and other risk factors
including, without limitation, variations in the value of securities, the
volatility and liquidity of equity trading markets, the volume of new
financings and mergers and acquisitions, competition in the marketplace for
suitable investments, sustainability of fees, nature and type of portfolio
company investments, ability to realize carried interest entitlements and
dependence on key personnel. Other factors, such as general economic
conditions also may have an impact on the Fund Group's results of operations.
Many of these risks and uncertainties can affect our actual results and could
cause our actual results to differ materially from those expressed or implied
in any forward-looking statement made by us or on our behalf. Except as
required by applicable law, we undertake no obligation to publicly update or
revise any forward-looking statement, whether as a result of new information,
future events or otherwise.
Non-GAAP Measures
Certain financial terms included in this press release (e.g.,
"distributable cash" and "payout ratio") are not recognized measures under
Canadian generally accepted accounting principles (GAAP) and do not have any
standardized meanings prescribed by GAAP. Therefore, readers are cautioned
that these measures may not be comparable to similar measures presented by
other issuers. For a more comprehensive discussion on the Fund's use of
non-GAAP measures, please see the "Presentation of Financial Information and
Non-GAAP Measures" section of the 2006 Annual MD&amp;A accompanying this press
release, which is also available on our website at gmpcapitaltrust.com and on
SEDAR at sedar.com.